Consumer Directed Health Plans - Frequently Asked Questions

Question

FSA

HRA

HSA

Does the employee own the funds in the account?

100% vested in their own deposits. Use it or lose it.

Generally no. However, the employer can include employee vesting.

Yes

Can the money be invested and the employee earn interest?

Generally, no.

Generally no, but if employer funds are vested with the employee, such funds may be invested by the employee.

Yes

Can the employee use the funds for things other than medical expenses?

Yes

Yes

Yes

Can Over-The-Counter (OTC) medical purchases be reimbursed?

Yes, with a Physician's written prescription.

Yes, with a Physician's written prescription.

Yes, with a Physician's written prescription.

Can the employee take the money with them when they change jobs?

100% vested in their own contributions.

Generally no. However, if vested the employer may allow fund portability.

Yes

How can the employee access funds?

Generally through claims reimbursements or the use of a debit card.

Generally through claims reimbursements or the use of a debit card.

Generally through claims reimbursements or the use of a debit card.

Who can contribute to the account?

Employee and employer.

Employer only.

Employee and employer.

Who is eligible?

Employers/employees.

Employers/employees. No restrictions on plan size or statutory benefit design.

Individuals/employers of any size who have established a qualified HDHP and are under age 65.

Does the account require a plan modification or a high deductible health plan?

No

No, but an HRA is usually funded through some form of plan design modification; usually a higher deductible.

Yes; a qualified HSA requires a High Deductible Health Plan (HDHP) that satisfies IRS requirements.

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